Tabuk Cement slips in quarter four, gains on year
Manufacturer cites higher sales to make up for maintenance period
Tabuk Cement Company saw net profits for the fourth quarter 2010 slip more than 6% against the same quarter last year in a tighter market and a period of maintenance ate into profits, though full-year takings rose.
The Saudi company’s after-tax gains fell to SAR 23.79 million from SAR 25.55 million last year, as gross profits slipped 15.57% to SAR 27.81 million and operating profits fell 17.6% to SAR23.8 million.
Net profits for the 12 months increased from SAR121.1 million to SAR123.3 million – up 1.82% as gross profits increased 0.5% to SAR135.42 million.
“The reason for the decline in profit for the fourth quarter to decrease the amount of sales and [the company] carry[ing] out major maintenance during the period,” the company stated to the Tadawul yesterday. “The reason for high profits in the full year [was down] to increase sales volumes, in addition to opening new sales markets.”
Cement manufacturers in Saudi Arabia have seen an erosion of both the sales volumes and values over the last year due to an increasingly saturated market. Though there is no explicit ban on exporting cement, the criteria that must be met does not provide an incentive to do so. Export sales declined between 2008 and 2009 – from 2.8 million tonnes down to 1.2 million tonnes – according to Argaam, the corporate web portal. However, cement sales overall in Saudi Arabia increased by 13%.
There are nine listed cement suppliers in the country, and countless others, competing to supply to the same projects. Earlier this month, Yanbu Cement Company experienced the opposite results to Tabuk - with fourth quarter profits declining though full-year results gained against the same periods in 2009.
Tabuk shares fell 0.267% to SAR 18.65 yesterday.